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MEMORANDUM OF UNDERSTANDING <br /> <br />Between <br /> <br />NORTH CAROLINA DEPARTMENT OF STATE TREASURER <br /> <br />And <br /> <br />COUNTY OF ORANGE, NORTH CAROLINA <br /> <br /> <br />Background <br />The Supplemental Retirement Income Plan of North Carolina (the “NC 401(k) Plan”) is a defined <br />contribution retirement plan sponsored by the State of North Carolina, administered by the North <br />Carolina Department of State Treasurer (the “Department”), and overseen by the North Carolina <br />Supplemental Retirement Board of Trustees (the “Board”). The NC 401(k) Plan is available to the <br />employees of participating state and local governmental employers in North Carolina, and Orange <br />County participates in the plan. <br /> <br />The NC 401(k) Plan is governed by the North Carolina General Statutes, the Internal Revenue <br />Code (the “Code”), regulations promulgated by the United States Department of Treasury (the <br />“Treasury Regulations”), and guidance and procedures issued by the Internal Revenue Service <br />(“IRS”). The NC 401(k) Plan is a qualified plan under Code Section 401(a) and received a <br />favorable determination letter from the IRS on November 16, 2016. <br /> <br />The Treasury Regulations require a 401(k) plan to have a written plan document governing the <br />operation of the plan. The Board adopted the current amended and restated plan document on <br />December 10, 2015, and the plan document has been amended through the most recent Board <br />meeting on February 23, 2023. The Department and Board are responsible for operating the NC <br />401(k) Plan according to the provisions of the plan document. <br /> <br />Participating employers in the NC 401(k) Plan are responsible for certain aspects of plan <br />compliance, including submitting employer and employee contributions in accordance with <br />applicable law and the plan document. From 2003 to 2022, Orange County did not make employee <br />contributions available in two of its 26 annual payroll periods, which violated the plan document <br />(the “Compliance Error”). <br /> <br />IRS Revenue Procedure 2021-30 describes the IRS’s Employee Plans Resolution Compliance <br />System (“EPCRS”). EPCRS includes the Voluntary Compliance Program (“VCP”), which allows <br />plans to submit proposed corrections of compliance errors to the IRS for approval. <br /> <br />Purpose <br />The Department, as administrator of the NC 401(k) Plan, plans to submit a proposed correction of <br />the Compliance Error to the IRS using VCP (the “VCP Submission”). <br /> <br /> <br />DocuSign Envelope ID: 80C8EC1A-BEE0-42B4-A8F7-77C58CF68141